Can somebody point me to the right direction as to how this lighting is done to recreate this lighting effect?
The game is 2D but uses a 3D lighting system.
Game Development Stack Exchange is a question and answer site for professional and independent game developers. It only takes a minute to sign up.Sign up to join this community
The Unity Lightweight Render Pipeline recently got a couple neat additions for 2d lighting. Among them are:
Keep in mind that all of these features are only available in a project using the Universal Render Pipeline, not in build-in or HDRP.
One thing it can not do (AFAIK) which seems to happen in the video posted in the question is some pseudo-3d displacement of lit areas. But that displacement seems to be pretty inconsistent in that demo video, so that might not be too much of a drawback.
You can try this asset from Asset Store [Disclamair: I am NOT affinity of it's author]: